According to a Tuesday newsletter from recording industry curmudgeon and analyst Bob Lefsetz, Universal Music Group has ordered all labels under the UMG umbrella to stop signing exclusive distribution deals with streaming services.
On Monday, Lefsetz writes, Universal Music Group CEO Lucian Grainge sent out a company-wide email to the effect. If you need any indication how big this policy move is, we should note, UMG was behind seven of 2015’s 10 best-selling albums and nearly 40% of the year’s recorded-music sales. They're the first major to outlaw the practice. Might the others follow?
The maneuver comes just days after Frank Ocean released the visual album Endless on Apple Music, fulfilling his contract with UMG's Def Jam, The FADER reports, freeing the artist to release Blonde independently also as an Apple exclusive. A former Apple employee, however, suggests this isn't quite the case. Blonde was very much an Apple exclusive, he says, but it was still released via UMG. It was perhaps the last Apple exclusive from UMG.
Major labels dislike exclusive streaming deals — they shallow the pool of customers. Spotify boasts 100 million users, Apple Music has about 15 million, and TIDAL has 4 million. Why pick any one pond, especially a smaller one? But then there's those fat distribution deals the artists are offered in exchange for a few million non-subscribing ears.
It should also be mentioned, as Stereogum made note, that Universal Music Group owns a significant piece of Spotify. Is UMG's new policy indicative of an industry wresting back distribution power? Can we expect Sony and Warner to follow suit? Is this the end of the exclusive as we know it? Or is Grainge punishing Apple and TIDAL for winning market share on the power of their Coloring Books and Lemonades and Pablos in an effort to add value to his company's investments?